I'm a thirty-year veteran of Wall Street and an outspoken critic of ineffective regulation and an advocate for economic and political sanity. Following a career as an in-house lawyer and industry regulator, I am now in private practice representing member firms, registered persons, Whistleblowers, and defrauded investors. I publish the RRBDlaw.com and the BrokeAndBroker.com websites.

Gibson Les Paul Guitars With Less Ebony

Among the guitars that I own is a Gibson Les Paul 2004 Standard Limited Edition with a 1950s neck, a transparent amber finish, and an ebony fretboard. According to the Department of Justice, I may have a problem with that fretboard. Anyone wanna buy an electric guitar cheap — no questions asked? I’m more than happy to strum a Fender or my beloved G&L.

The Ebony Ban

Madagascar Ebony is a slow-growing tree species threatened by over-exploitation, which has significantly reduced Madagascar’s forest cover. Since 2006, harvesting ebony and exporting it in unfinished form from Madagascar has been banned. Since May 2008, it has been illegal under the Lacey Act to import into the United States plants and plant products (including wood) that have been harvested and exported in violation of the laws of another country.

When manufacturing its guitars, the Gibson Guitar Corp. used sawn boards of Madagascar ebony in the form of “fingerboard blanks.” Notwithstanding the 2006 ban, Gibson’s Madagascar supplier continued to obtain the ebony fingerboard blanks from an exporter in Madagascar.

The 2008 Trip

In June 2008, a Gibson employee joined a non-profit-organization’s sponsored trip to Madagascar, where participants were told that since 2006, Madagascar had bannedthe harvest of ebony and the export of any ebony products that were not in finished form. The ebony fingerboard blanks used by Gibson were considered unfinished and illegal for export. Among the facilities visited on this trip was that of Gibson’s Madagascar ebony exporter, and it was noted that the wood at the facility was under seizure at that time and could not be moved.

Upon returning from Madagascar, the Gibson employee conveyed the information about the ebony law to superiors and others at Gibson, but the disclosures were not further investigated or acted upon — and Gibson received four shipments of Madagascar ebony fingerboard blanks from its supplier between October 2008 and September 2009.

Settlement

On August 6, 2012, Gibson entered into a criminal enforcement agreement with the United States resolving allegations that the company violated the Lacey Act by illegally purchasing and importing ebony wood from Madagascar and rosewood and ebony from India.

The criminal enforcement agreement defers criminal prosecution for Lacey Act violations and requires Gibson to pay a $300,000 penalty and a $50,000 community service payment to the National Fish and Wildlife Foundation to promote the conservation, identification and propagation of protected tree species used in the musical instrument industry and the forests where those species are found. Also, Gibson will implement a compliance program. In related civil forfeiture actions, Gibson withdrew its claims to the wood seized in the course of the criminal investigation, including some $261,844 in invoiced shipments of Madagascar ebony.

UPDATE: A number of commentators on the original iteration of this story have raised many excellent points about the motivation behind the government’s investigation and prosecution of Gibson. As such, make sure to read Gibson’s press release: Gov’t says wood is illegal if U.S. workers produce it (August 25, 2011), which states in relevant part:

Gov’t says wood is illegal if U.S. workers produce it Thursday, August 25, 2011

The Justice department bullies Gibson without filing charges

The Federal Department of Justice in Washington, D.C. has suggested that the use of wood from India that is not finished by Indian workers is illegal, not because of U.S. law, but because it is the Justice Department’s interpretation of a law in India. (If the same wood from the same tree was finished by Indian workers, the material would be legal.) This action was taken without the support and consent of the government in India.

On August 24, 2011, around 8:45 a.m. CDT, agents for the federal government executed four search warrants on Gibson’s facilities in Nashville and Memphis and seized several pallets of wood, electronic files and guitars. Gibson had to cease its manufacturing operations and send workers home for the day, while armed agents executed the search warrants. Gibson has fully cooperated with the execution of the search warrants.

• Raid shut down Gibson factories and cost company money This is the second time that federal agents have raided Gibson facilities and disrupted production – this time causing lost productivity and sales.

• Wood seized was verified as FSC® Controlled Wood according to the Forest Stewardship Council™ (FSC®) Controlled Wood requirements The wood the Government seized on August 24 is from a Forest Stewardship Council™ certified supplier and was received as FSC® Controlled Wood, meaning that the wood conforms with the FSC Controlled Wood Standards of the Forest Stewardship Council™, which is an industry-recognized and independent, not-for-profit organization established to promote responsible management of the world’s forests. FSC® Controlled Wood standards require, among other things, that the wood not be illegally harvested and not be harvested in violation of traditional and civil rights. See www.fsc.org for more information. Gibson has a long history of supporting sustainable and responsible sources of wood and has worked diligently with entities such as the Rainforest Alliance and Greenpeace to secure FSC® certified supplies. The wood seized on August 24 was evaluated to FSC® Chain of Custody Standards.

• Nearly two years later, no charges have been filed In 2009, more than a dozen agents with automatic weapons invaded the Gibson factory in Nashville. The Government seized guitars and a substantial amount of ebony fingerboard blanks from Madagascar. To date, 1 year and 9 months later, criminal charges have NOT been filed, yet the Government still holds Gibson’s property. Gibson has obtained sworn statements and documents from the Madagascar government and these materials, which have been filed in federal court, show that the wood seized in 2009 was legally exported under Madagascar law and that no law has been violated. Gibson is attempting to have its property returned in a civil proceeding that is pending in federal court.

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Oh well. I own a few Gibson Les Pauls and they are fine guitars and represent an American tradition of quality and craftsmanship. However, Gibson knew and understood it was breaking the law and Gibson’s CEO was fully aware. A $300,000 fine is a small price to pay and Gibson is lucky it didn’t get shut down. Gibson is one of a very small number of guitar makers that use ebony in construction. Gibson should stick to Rosewood and continue with its new baked Maple fret boards.

Fine electric guitars are among the few artisan traditions still left in the USA, and all the knock-offs and cheapo wannabe crap from overseas proves that we still make it best in here. I’ll take my USA G&L and Gibson anyday over the stuff coming in across the border and from Asia — which is not to say that great acoustical instruments aren’t made in those regions but for the electrics, it still has to be made in the States. Regardless, I’d no more want an elephant’s ivory on my frets than endangered wood — so, yeah, I agree with you. Wrong is wrong. Hopefully, Gibson will find a workable substitute

“One of a very small number of guitar makers that use ebony…” ????Nearly all of the quality guitar manufacturers use Ebony on the fretboards of their best guitars. I own two Gibson Les Pauls, along with a few other guitars. One of my Les Pauls has an Ebony fretboard and the other one has a rosewood fretboard, along with all of my other guitars. There is no comparison… I will never buy another Les Paul with anything but an Ebony fretboard. Anyone who really appreciates the Gibson Les Paul knows that the tone, playability, and feel of an Ebony fretboard is second to none. This whole issue is about nothing but politics… it is all about the political affiliation of the head of Gibson. They were NOT the only manufacturer using Ebony… they were just the one that ended up being attacked by an over-reaching, over-zealous federal governement, looking to score political points.

As you know, there is a great debate that will never be resolved among lovers of Les Paul, Strats, and Teles (I have had a long love for a G&L Legacy Double HB). I’ve long been partial to the Strat-types but there’s no denying the lush sound of a Gibson Les Paul — nothing like it. Oddly, I seem to prefer rosewood fretboards to ebony, which just goes to show how we all come to develop an incredible relationship with our guitars. I still miss my Gretsch Country Gentlemen 1967 and can’t quite explain my love/hate relationship with Ovation.

As to this ebony issue with Gibson, you’d think that with all the nonsense going on in the world that something like this would not require a criminal prosecution. Consequently, I too suspect that there’s more politics involved here than genuine Lacey Act concerns. All of which still makes me wonder why Gibson didn’t tell the government to shove its case and try the dispute before a jury — hey, there would probably have been more than a few guitar pickers on that jury!

Regardless, the larger challenge is whether Gibson can maintain quality control. If nothing else, hopefully this column has introduced the issue to a lot of folks and maybe someone will put together some national coalition. Bigger things have started from less.

LOL… I too have a love/hate relationship with Ovation (Mine is a Standard Balladeer), but I can explain it. They play like an electric, and sound great when amplified, but just don’t quite cut it when played acoustically.

I think the thing that irritates me the most about this whole issue is the persecution of a wood products manufacturer who creates something beautiful from a log. I’ve spent my entire career in the wood products industry, where we all know that no one cares more about the health of forests, no one cares more about the preservation of the various specie of wood, and most importantly, NO ONE plants more trees and manages more forests than the manufacturers of wood products. Trees are a crop, like any other crop… except that they can produce beautiful furniture, instruments, etc. that can last for centuries. Old growth forests eventually burn to the ground. Carefully managed (and harvested) forests thrive.

Finally — a guitar player chimes in! You nailed the Ovation issue, so I know you are a player. As to the forestry points that you raise, I agree.

Then tension in this Gibson story cuts through on many levels. As to the company itself, Gibson makes a wonderful product — and many guitarists swear that the Les Paul line is the best of the best. As a kid, way before I could afford a really good axe, I used Guild and Harmony guitars and still look back upon them with fondness. But, when I went and pressed my nose against the glass of the music store, it was to gaze with desire upon a Fender Strat or the legendary Les Paul. At some point I bought a used 1967 Gretsch Country Gentleman, which was as fine a guitar as there was or, perhaps, is.

On the other hand, we certainly are having natural resource issues around the world, whether in the Amazon or Madagascar or wherever. Although many companies who harvest woods do so responsibly, there are still black marketeers and those who exploit the laws.

Whatever the ultimate issue between the US Gov’ts enforcement of the Lacey Act and Gibson, a few issues still don’t reconcile. Why was there the need for a high-profile federal raid with armed combat suited agents? Did the feds think that the folks at Gibson were going to greet them with weaponry?

Also, why did this even need to rise to the level of a criminal case when it seems that there were many nuances of legality concerning the Indian woods and whether the Madagascar government had deemed the subject ebony as illegally harvested and illegally exported. From my perspective, far too much of this case smacks of politics — which other commentators have duly noted.

In the end, perspective is everything. Gibson is a proud US manufacturer that has long crafted one of the greatest musical instruments in the world. Gibson has also long supported responsible forestry and quality woods, so I hardly think that such a company favors indiscriminate deforestation. Still — I’m a bit puzzled as to the company’s response to the 2008 trip of its employee and the corporate decision to settle this somewhat dubious case.

Alas, time to move on to another story. A last shout out to all my guitar buddies: Rock On!